Federal housing officials announced on April 22 that mortgage lenders may now use VantageScore 4.0 when underwriting loans sold to Fannie Mae and Freddie Mac, breaking a decades-long monopoly held by the classic FICO score. FICO 10T, a newer model from the same company that built the original, will be permitted in the coming months.
The move marks the first real competition in mortgage credit scoring in a generation. For borrowers who pay rent and utilities on time but carry thin credit files, the newer models could mean the difference between approval and rejection, or between a decent rate and a punishing one.
That is the promise. Whether it delivers depends on details that most homebuyers will never hear about at a press conference.
Federal Housing Finance Agency Director Bill Pulte and Housing and Urban Development Secretary Scott Turner jointly announced the policy shift. Pulte said twenty-one large mortgage lenders are part of the first wave that will use VantageScore 4.0, and that Freddie Mac has already taken $10 million in loans approved under the new scoring model, as CNBC reported.
Turner said the Federal Housing Administration, which insures many loans for first-time buyers, will also soon adopt VantageScore 4.0 and FICO 10T for FHA-insured mortgage underwriting.
The classic FICO score had been the only approved model for decades. Lenders who wanted to sell loans to Fannie Mae or Freddie Mac had no choice but to use it. Now they have options, and those options treat borrower data differently.
Both VantageScore 4.0 and FICO 10T can incorporate rent and utility payment data that the classic FICO score ignored. In theory, a renter who has never missed a payment in five years could see that history reflected in a mortgage-qualifying score for the first time.
Pulte framed the logic plainly during the press conference:
"How can you not have credit scores include a major factor in the past payment history of somebody with rent? That's highly predictive."
He has a point. There are roughly 46.4 million renter-occupied households in the United States, according to the Federal Reserve Bank of St. Louis. Many of those renters have years of on-time payments that never show up in a traditional credit file.
But here is where the promise runs into reality. Credit expert John Ulzheimer, president of The Ulzheimer Group in Atlanta, offered a blunt corrective:
"Just because you're renting an apartment doesn't mean it's being reported to any credit bureau."
A VantageScore spokesperson confirmed that its models currently capture only rent or utility payment data that consumers opt in to have reported to Equifax, Experian, and TransUnion. The share of consumers whose rent payments are reported to credit agencies rose to just 13% last year, up from 11% in 2024, the New York Post reported, citing a TransUnion survey of 2,006 adults conducted in March 2025.
That means roughly 87% of renters are not getting credit for their payments under any model. Rent-reporting services exist, but Ulzheimer noted they may come with a monthly fee of around $10, a cost that falls, as usual, on the consumer.
Beyond rent, the newer models use what is called "trended data." Instead of taking a single snapshot of a borrower's balances, trended data examines credit behavior over time, typically the last 24 months.
Ulzheimer explained the difference with an example. Two consumers might carry the same balance on a credit card in a given month. One has been paying it down steadily. The other has been running it up.
"They can look identical based on a credit score, but they have very different risk."
That distinction matters for responsible borrowers. It also matters for people who used to game the system. Under the old model, a borrower could pull a credit report a couple of months before applying, pay down credit card balances aggressively, and present a healthier-looking score than their long-term habits warranted.
With trended data, that trick loses its punch. Ulzheimer was direct about the shift in strategy it demands:
"You'll have to do a better job of managing your credit card debt over time, not just a month or two before you put in a mortgage application."
That is a fair trade. Borrowers who manage their debt responsibly over two years get rewarded. Borrowers who don't can't fake it at the last minute. The market gets a more honest picture of risk. Hard to argue with that.
As we previously covered, the acceptance of rent and utility data by Fannie Mae and Freddie Mac could open doors for millions, but only if the reporting infrastructure catches up to the policy.
New credit scoring models are a welcome modernization. They reward good behavior that the old system ignored. They introduce competition into a market that had none. Those are real gains.
But no credit score model solves the fundamental problems facing American homebuyers right now. Mortgage rates remain elevated and volatile. Housing supply is constrained in much of the country. Affordability has eroded for years.
A better score might help a buyer on the margin qualify for a loan. It will not conjure a house that doesn't exist or bring a monthly payment within reach when rates are high and prices are sticky. Officials who trumpet expanded access deserve credit for the incremental improvement, but they should not pretend it addresses the structural barriers that keep homeownership out of reach for working families.
The broader housing picture remains challenging. Mixed signals on mortgage rates continue to shape buyer behavior, and sellers are already adjusting to a market where homes sit longer before moving.
Industry leaders have argued that supply constraints, not just rates, are the real obstacle. Zillow's CEO has made that case explicitly, pointing to inventory shortfalls as the deeper problem. And the slowdown is showing up across the housing economy, even major retailers like Lowe's have flagged headwinds tied to cooling home-buying and renovation activity.
For consumers who are planning to buy a home in the next year or two, the practical takeaways are straightforward.
First, find out whether your rent and utility payments are being reported to the three major credit bureaus. If they are not, and you want them included, you will likely need to sign up for a reporting service, and pay for it.
Second, understand that trended data means your credit behavior over the last 24 months matters more than a quick clean-up before applying. Start managing credit card balances now, not two months before you walk into a lender's office.
Third, do not assume these changes guarantee you a better score. Some consumers will benefit. Others may not, depending on their credit profile and whether their lender has adopted the new models. The twenty-one lenders in the first wave have not been publicly identified.
And fourth, keep your expectations honest. A better credit score is one piece of the puzzle. It does not override high rates, low inventory, or the basic math of what you can afford. As homes sit on the market longer, both buyers and sellers are learning that no single policy change transforms a tough market overnight.
The introduction of VantageScore 4.0 and, soon, FICO 10T into mortgage underwriting is a sound, market-oriented reform. Breaking a scoring monopoly that lasted decades gives lenders better tools and gives responsible borrowers a fairer shot. FHFA Director Pulte and HUD Secretary Turner deserve credit for pushing the change forward.
The risk, as always, is that Washington oversells the fix. Expanded credit scoring helps at the margins. It does not rebuild the housing supply, bring down rates, or make a $400,000 starter home affordable on a median income. Those problems require harder answers than a press conference can deliver.
Good policy earns trust by doing what it says, not by promising what it can't.